More Studies Say Biofuels Have a Minor Impact on Food Costs

A new report from New Energy Finance concludes that biofuels are
responsible for at most 8% out of the 168% rise in grain prices since
2004, and for at most 17% out of the 136% rise in global food prices.
As a proportion of the total rise in prices, biofuels can take the
blame for less than 5% of the rise in grain prices and at most 12.5%
of the rise in global food prices. The report concludes that
population growth placed the greatest pressure on grain prices, and
that growth was not matched by increases in yields. The increasing
price of fossil fuels also caused 35.2% of the increase in grain
prices. See the New Energy Finance press release (PDF 16 KB).
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Meanwhile, DOE and the U.S. Department of Agriculture estimate that
the United States would use an additional 7.2 billion gallons of
gasoline in 2008 if there were no biofuels available. Ethanol
production alone has moderated U.S. gasoline prices by an estimated
20-35 cents per gallon, saving a typical U.S. household as much as
$300 per year. In addition, the price of food commodities has a
limited impact on retail grocery costs in the United States, so
ethanol and biodiesel consumption account for only about 3%-5% of the
increase in U.S. retail grocery prices over the past year and a half.
These statistics were included in a letter sent to Senator Jeff
Bingaman by Energy Secretary Samuel Bodman and Agriculture Secretary
Edward Schafer. See the DOE fact sheet and the full letter (PDF 922 KB).

Alexander Karsner, the head of DOE's Office of Energy Efficiency and
Renewable Energy (EERE), recently seconded that conclusion, while also
noting the benefits of ethanol production. In testimony on June 12
before the Senate Committee on Energy and Natural Resources, Assistant
Secretary Karsner reported that corn ethanol delivers 25% more energy
than the fossil energy used to produce it, while resulting in 20%
lower greenhouse gas emissions than gasoline. He also noted that more
efficient ethanol biorefineries fueled with biomass resources can cut
life-cycle greenhouse gas emissions by up to 52% relative to gasoline.
The next generation of ethanol, produced from "cellulosic" non-edible
plants and trees, will reduce life-cycle greenhouse gas emissions by
86% relative to gasoline. See a summary of Assistant Secretary
Karsner's testimony on the EERE Web site, and see the full testimony on the committee's Web site.